Major Obstacles Face Plan to Sell Prime VA Lands

The Reagan Administration has proposed selling more than 100 acres of government land in Los Angeles in a transaction that could change the face of one of the city's fastest-growing neighborhoods by opening up extensive swatches of real estate that have been undeveloped since the days of the Spanish ranchos.

The proposal to sell Veterans Administration holdings in Westwood and the San Fernando Valley community of Sepulveda for $360 million was quietly revealed in a letter from the VA to both houses of Congress on Feb. 5.

It is part of President Reagan's long-held goal of shrinking the national government, but the proposal is expected to face serious obstacles as it makes its way through the political process. They include:

- Questions raised by Rep. G. V. (Sonny) Montgomery (D-Miss.), chairman of the House Veterans Affairs Committee, who has suggested that the land be kept in reserve.

- Opposition from local officials, who have vowed to block any development that would aggravate traffic on congested Westside streets or threaten the Mission Hills Little League baseball diamonds in Sepulveda.

- A legal challenge from the heirs of pioneer families who donated much of the Westwood land almost 100 years ago for an old soldiers' home. VA attorneys said the families' claims that the land should revert to them could take years to settle.

At issue are parcels that make up just under 25% of the 442-acre Veterans Administration complex in Westwood, and 64 of the VA's 146-acre hospital grounds in Sepulveda.

The proposal--which came over objections within the Veterans Administration--was initiated by the Office of Management and Budget as part of the 1987 federal budget.

Despite the problems, Mia Kelly, management and budget office spokeswoman, said the Administration's top priority now, as it faces the deadlines of the Gramm-Rudman budget-balancing bill, is "cutting the pork . . . cutting any kind of excess in government."

This "privatizing" strategy includes the proposed sale of federal assets nationwide, including the Bonneville Power Administration in Oregon, the Navy's Teapot Dome petroleum reserves in Wyoming, Earth satellites, other federal lands and a chunk of the government's $200 billion in outstanding loans and other obligations.

Kelly acknowledged the existence of "legal concerns as well as basic business concerns" about putting the VA property up for sale at a time when land prices may be depressed because of restrictions on development imposed by Los Angeles officials.

'Willingness to Take Risks'

"The theme we've perceived here is a willingness to take those risks right now," she said. "If we need it in 10 years, we'll deal with it then."

Everett Alvarez Jr., acting VA administrator, told a congressional hearing earlier this month that he is "100% in agreement" with Montgomery, who asked whether it would not be wiser to save the land for future VA expansion or simply to retain a green space in the heart of a fast-growing area.

Nevertheless, the acting director said in his letter to Congress that the VA hopes to raise $360 million through the sales, a sum that White House planners already have included as revenue in the VA's 1987 budget.

"If the VA really doesn't need it, that's fine. Let them go ahead and get rid of it," Montgomery said later through a spokesman. "But we object to forcing them to get rid of land where there is a potential VA use of the land."

The land includes some of the most attractive real estate in Los Angeles, including a 10-acre triangle at the northeast corner of Wilshire Boulevard and San Vicente Boulevard.

Real estate brokers said this land would be ideal for an office building or entertainment complex were it not for the determination of city and county officials to freeze development along the Wilshire Corridor.

"I would love that land," said Peter Chirchick, a sales officer at the Fred Sands real estate office in Beverly Hills. "I would have several clients who would be interested." However, he said, because of zoning problems, "I sincerely doubt whether you could put in a high-rise (building)," like the office towers that have sprung up farther west on Wilshire Boulevard.

County Supervisor Ed Edelman, the elected official who would be responsible for the unincorporated area if it leaves federal hands, said, "I think I'd be concerned about any increase in density."

"I think it's foolish for the federal government to bail out its financial condition by selling public land," he said. "Public land is public land, and unless there are overriding considerations, it should not be sold."

Zoned for Residential Use

The entire VA tract in Westwood is currently zoned for multiple-residential use. It is also designated "P" in the county general plan, which sets it aside for public and semipublic purposes.